Challenger Energy Group PLC (AIM:CEG, OTC:BSHPF) told investors its second half work programme will focus on maximising production from existing well stock, whilst preparing plans for new well drilling in 2023.
It plans to recomplete between ten and fifteen existing wells in order to achieve near-term production growth targets, with the lower-cost and lower-risk programme expected to be sufficient to bring average output up to 550 to 600 barrels of oil per day by the end of the year.
Well recompletion programmes will take place across each of the company’s Goudron, Inniss-Trinity and Bonasse fields, with the schedule anticipating completion by October.
At the same time, Challenger said it will also reactivate between ten and twelve wells that are currently not producing by October also, and, a water-injection enhanced oil recovery operation is due to begin by November.
“We have worked hard to redefine Challenger Energy's operations around a simple strategic focus: to build cashflow from our production base in Trinidad, and to reach a point where as a group we operate on a cashflow positive basis,” said chief executive Eytan Uliel.
He added: “We expect this work to deliver the near-term production growth we are targeting in the surest, lowest risk way possible and, if successful, provide a solid basis on which to approach the execution and funding of a drilling campaign in 2023.
“It will be a busy second half of 2022 for Challenger Energy. I look forward to updating on our progress as the year progresses."
Looking to 2023, the company noted that it is currently evaluating up to nine potential new well opportunities across its portfolio and the new well drilling campaign would be expected to significantly uplift production, consistent with Challenger’s longer-term production target of 1,000 bopd.
Challenger said it will evaluate an appropriate funding strategy for new wells, with a view to reducing the capital burden and risk to the company – options will include ‘risk sharing opportunities’ with contractors and partners, it added.
A more extensive enhanced oil recovery campaign could also follow in 2023, subject to technical outcomes of the initial work this year.
Elsewhere, Challenger said it has applied for an extension of its initial work period for the Weg Naar Zee field, in Suriname, with the request recognising delays arising from the pandemic.